Perth Property Investing in 2024

Is Perth a Good Place to Invest in Property?

Perth is considered a good place to invest in property in 2024 due to strong demand, low vacancy rates, and increasing property prices. The city’s growing economy and population also support long-term value growth, making it an attractive option for both investors and homebuyers. Perth’s growing economy, driven by mining, technology, and infrastructure projects, supports sustained property value growth.

Additionally, population growth and urban development are contributing to increased demand for housing. With these favourable market conditions and ongoing government investment in the region, Perth offers attractive opportunities for both long-term and short-term property investors.

What Are The Benefits of Property Investment in Perth WA?

Real estate investments can be incredibly rewarding in Australia, presenting enormous lucrative opportunities to investors. Perth offers individuals excellent options to create wealth and financial security. Here’s why Perth might be a perfect choice for investing in property.

It Leads to Capital Appreciation

Perth has a flourishing construction sector, leading to a rapid rise in property values. That means potential investors in Perth can reap maximum profits as their properties appreciate over time. Capital growth protects investors against negative equity, which can diminish their net worth.

It’s a Less Risky Investment Alternative

Unlike investing in equities and bonds, real estate is less risky and provides more safety. Property markets often experience lower volatility than stock markets, mainly because of their physical nature. Besides, there’s always high demand for rental property, which helps to boost investor cash flow.

It Can Offer a Predictable Income Stream

Real estate investors aim to earn some form of financial return on their investments.  When an owner rents property to a resident, they receive a rental income. This continuous cash flow can help offset expenses such as property maintenance and mortgage payments, which leaves room for potential profits.

It Can Provide Tax Benefits

Property investments are great for minimizing taxable income. Investors in Perth can enjoy deductions on mortgage interest, home improvement, and property tax. These enticing tax benefits significantly help investors to save and build wealth.

Investors Can Receive Capital Gain Exemptions

When an investor disposes of property after it appreciates, the profit made from it is subject to taxation. Fortunately, any Australian who has owned property for more than one year is qualified for a 50% discount on capital gains tax. This helps investors to reduce their tax obligations.

What Makes a Good Investment Property in Perth, WA?

Perth has a fast property market growth compared to other cities in Australia. However, investors need to make smart financial decisions to get a strong return on their investments through passive income or tax breaks. Here’s what you should consider when choosing a property in Perth.

The Location

An investor needs to make location a priority when investing in property in Perth. A stunning property isn’t any good when people can’t access it easily. Its proximity to the public helps to determine its value and how viable it is for investment. This can lead to increased capital growth and higher rental income.

The Right Property  

It may appear easy to find the right property. However, as an investor, you need to decide on the kind of investment you want to make. Whether commercial or residential, an ideal asset should have the potential for capital growth.

Down Payment Requirements

When buying properties, down payments vary depending on the type of property you purchase. Typically, an investment asset will attract a higher upfront payment compared to a standard family home. Lenders calculate these amounts as a percentage of the buying price of a real estate property.

Getting Started – How Can a Perth Buyer’s Agent Help?

You can easily get entangled in the real estate web, especially when looking to buy the right property.  That is why you may need a buyer’s agent to help you in the complex home-buying process.

These real estate professionals advocate for the buyer’s interests when property transaction take place. They work exclusively for the buyer, guiding them to find a suitable property worth their consideration.

Here’s how buyer agents help in securing ideal homes:

• A buyer agent establishes what a buyer expects from a property search, including the location and budget. This information forms the basis of the search to find properties that suit the buyer’s criteria.
• They have an incredible understanding of the current trends in the local property market. They can offer valuable insights regarding property, which is crucial in making informed decisions about property investments.
• They will arrange for inspections once the buyer identifies potential properties. This process together with viewing is essential to pinpoint any potential issues that may arise.
• Buyer agents are expert negotiators who will talk on the buyer’s behalf to secure a favourable price for the property.
• Property transactions involve many hidden processes like pest inspection. Buyer agents will unmask any unwanted risks by performing due diligence on potential properties.
• They will take care of complex contract processes, once the selection of property is complete. They will engage with other professionals like solicitors to deal with conveyancers and ensure a smooth settlement process.

Remember that as a new investor, you need time to gel with other parties in the property market. However, as that happens, engaging a licensed buyer’s agent is a sure way to succeed in your property.

What are The Tax Implications of Earning Income From a Property?

Real estate investing focuses on building wealth, but investors need to understand their tax obligations to avoid losing money. The tax office will have a cut of any rental income earned from the property.

Here’s how taxation applies to investment properties:

• Income tax — The full amount and any associated payment earned from renting property is assessable for tax. Notably, if a property incurs losses, the investor may offset it against other taxable income to lessen the tax burden.
• CGT — When you sell your property, the profits earned are subject to tax. If you’re patient enough to hold that asset for one year, you can receive a 50% discount on capital gain tax.
• Land tax — Any property you own and is not part of your current residence is subject to annual land tax. The amount of tax levied depends on the jurisdiction, upon reaching a specific threshold.
• Property tax — These taxes are levied on local government services like garbage collection to fund public facilities. The rental property owner pays these levies and not the tenants living in the residence.

Claimable expenses

• Council rates
• Corporate fees
• Advertising costs
• Management fees on property
• Costs of repairs and maintenance

Negative gearing

In some cases, a property owner can incur a net loss.  If your income is less than your expenses, you can claim tax deductions from taxable income.

Investors should avoid making this option a money-making technique. Instead, they should use it as a means of reducing tax. Remember, this strategy can only be effective if you plan to hold that loss in anticipation of making a profit from the property in the future.

On the contrary, when your investment property becomes positively geared, the rental income earned is taxable. That means your property won’t be eligible for tax benefits associated with negative gearing.

How Can I Track How a Perth Suburb I’m Looking Into Has Performed?

A property doesn’t necessarily appreciate in value when purchased. Initially, an investor can face challenges when holding an investment. That’s why evaluating a suburb’s growth rate, and its performance, is crucial. If invested wisely, capital growth can help to increase equity after carrying out extensive research.

How Do I Work Out The Return on My Investment?

Investors have different things on their mind when investing in property. On top of earning rental income, one common motive remains financial growth. Real estate owners can assess their property’s profitability by working out the rental yield.

This is a measure of how much return a property generates expressed as a percentage of that asset’s capital value. For example, if your property earns $7,000 yearly and the value of $100,000, 7% is the rental yield.

Additionally, tenants may have a different view of what they want in a property. That’s why an investor must always view it in the lens of a client.

Here are a few features that can make a property appealing to tenants:

• Location — When tenants look for a place to live, location is a crucial consideration. Properties that are easily accessible to the public tend to have more appeal. Having good transport and amenities close to the people improves people’s way of living.
• Security — Your tenant doesn’t have to feel unsafe when walking down their front door. A good property investment must provide round the clock security to its tenants.
• Appliances — Tenants use appliances daily, and investors must ensure appliances are in good working condition and energy-efficient to make them more appealing to tenants.

Why Should You Always Use a Network Exchange Realty Property Manager?

Real estate management has many complexities. That’s why you may need a partner to help you manage your assets.

Here are the benefits of using a property manager for your investments:

• It significantly reduces management stress. A property manager will handle tenant issues on your behalf, providing the much-needed peace of mind.
• Managing property involves handling complex processes that can take long to end. A property manager helps to free up time and use other essential priorities.
• It allows for extensive tenant screening, including background checks to establish reliable and responsible renters.
• Property managers role is to keep properties in good shape, including fixing and replacing faulty equipment

In addition to the above benefits, property managers provide the following services.

• Lease administration
• Financial reporting
• Marketing and advertising
• Tenant relation management
• Asset management

Remember, experienced property managers stay abreast with changing trends in the real estate sector. They will look for red flags and help you find a good tenant and ensure you earn a reliable income stream from your assets.

What are a Landlord’s Responsibilities?

The law obligates a property owner to offer renters a safe and habitable home. The tenancy act outlines specific duties that landlords need to follow, including:

• Ensuring that structural owners repair essential services like water, heating, and plumbing when they occur.
• Complying with applicable building codes and to ensuring a conducive living environment.
• Providing safe and habitable rental properties during the lease period. The facility should be free from any hazards and harmful materials.
• Managing common areas like staircases and entryways efficiently. Landlords collect service charges that are used to repair of common areas.

Like other investments, putting your money in property can come with major risks. Unexpected market slumps can happen, which can make you lose the property game. But property managers can help you run the daily operations of the property, including repairs and maintenance.